Semester : III Electives
Title of the Subject / course: Productivity Management
Course Code :
Credits : 4 Duration : 40
Learning Objectives
1 To understand importance, scope and application of productivity
2 To understand linkage of productivity concept from individual, department wise & functional areas, sectors of economy, national and international economy.
3 Various approaches, measurement of productivity planning & conditions improvement as one of the competitive dimension in any business.
4 Productivity as a system approach.
Prerequisites if any
Connections with
Subjects in the current
or Future courses
Module
Content Activity Learning
outcomes
1
Concept of productivity application in manufacturing and service industries and different functional areas.
Lecture
2
Measurement of productivity.
Understanding improvement cycle importance of measurement like partial total factor multifactor and their applications for analysis measurement of resource production.
Lecture & application analysis
Use in decision making using calculations
3
Various models of productivity
1. Sumanths total productivity model
2. Sumanths five pronged model
3. American productivity model
4. Sink Multi factor model
5. Application by numerical.
Lecture and case studies
Using in different situation
4
Various Approaches to production.
1. Classic ILO approach
2. Kaizen/TQC approach
3. Elimination 3 MV approach
4. Participative/ Involvement
5. Creativity based
Lecture and case studies
Using in practical scenario
5 Application of new/old techniques lectures
of productivity improvement & application
in all area of management.
1. JIT & Lean type of production system
2. MRPI & MRPII, ERP.
Lectures &
Application
3. TQM ISO quality systems.
4. B.P.R
6 Learning curves.
Concept, application, Quantitative, estimation, limitation
Lecture and case studies
7 Incentives
1. Financial
2. Non financial
3. Various incentive schemes based on the group, profit sharing systems
4. Result oriented schemes
5. Calculation of incentive index
Lecture and numerical
8 Work study
1. Method study
2. Motion & Time study
3. Works measurement
4. Objectives, method, application
Lectures & Application
9
Value analysis & Value Engineering.
1. Concept
2. Difference
3. Procedure used
4. Importance in today’s business environment
5. Various application functional areas for product process and system.
10 People/ Enrolment/ Participation
1. Quality circles
2. Group kaizen
3. Suggestion schemes
4. Suggestion schemes
5. Small group involvement
11
Recent production improvement techniques & applications. Use of various ratios to
determine improvement in productivity.
12 Creative based techniques
1. Brain storming
2. Whole brain thinking
3. Nominal group
4. Use in creative problem solving with practical application
Lecture role play
13
Ergonomics
1. Concept design of work place to suit human being use of anthropometric data principles of motion economy effect of environment of productivity
2. Design of work stations use in connection with process observation.
3. Concept of muri (non value adding strain & its limitation)
Lectures & Application
Text books
1 Productivity Technique Dr Uday Salunkhe & Dr Srinivas Gondhalekar
2 TQM Shridhar Bhat
3 Productivity Technique Shirke
Reference books
1 Work Study ILO
Assessment
Internal 40%
Semester end 60%
From
UNIVERSITY OF MUMBAI
Restructured & Revised Syllabus under
Credit based Semester and Grading System
for
Master of Management Studies (MMS)
Semester III & IV
2 Years full-time
Masters Degree Course in Management
(Effective from the academic year 2016 – 2017)
Proposed Revision for MMS Syllabus wef AY 2016-17 (Batch 2016-18)
Presentation on theme: "PRODUCTIVTY TECHNIQUES"
TEXT BOOKS
1. PRODUCTIVITY TECHNIQUES By Srinivas Gondhalekar & Uday Salunke.
2. PRODUCTIVITY TECHNIQUES By P.S.Shirke.
3 SESSION 1. INTRODUCTION COMPARISON OF PRODUCTVITY WITH WORK STUDY, INDUSTRIAL ENGINEERING & OTHER OPTIMISATION METHODS.
SCALES OF MEASUREMENTS. NOMINAL. ORDINAL. INTERNAL.
4 APPROACHES TO PRODUCTIVITY MEASUREMENT
1. COMPARISON OF CURRENT WITH HISTORICAL BASE.
2. COMPARISON OF PERFORMANCE ENTITIES.
3. COMPARISON OF ACTUAL PERFORMANCE WITH A TARGET.
5 PRODUCTIVITY HAS SEVERAL BELIEFS
As per Fenske there are 15 concepts.
As per Prem Vrat there are 20 definitions.
6 SIMPLY SPEAKING PRODUCTIVITY PRODUCTIVITY = OUTPUT / INPUT.
PRODUCTIVITY IS REPRESENTITIVE OF THE FOLLOWING : -- ECONOMIC, FINANCIAL, INVESTMENT, GROWTH, PROFITABILITY, RATE OF TURN OVER, CASH INFLOW, RATE OF PRODUCTION, RATE OF DOING WORK, COST OF PER UNIT OF PRODUCTION, COST OF PER UNIT OF MEASURE ABLE SERVICES ETC.,ETC.
7 WHAT IS PRODUCTIVITY ?? PROFITABILITY IS THE MOST IMPORTANT & SIGNIFICANT OBJECTIVE OF CARRYING OUT BUSINESS. PRODUCTIVITY IS A FUNCTION OF MANY FACTORS. IMPORTANT ONES ARE : - STATUS OF DEMAND & SUPPLY. VALUE OF OUTPUT / PRODUCTION. INPUT COSTS.
8 WHY WE NEED TO IMPROVE PRODUCTIVITY ??
FOR HIGHEST PROFITABILITY WE MUST USE ALL RESOURCES OPTIMALLY. BY OPTIMAL UTILIZATION OF RESOURCES WE EXTRACT BEST VALUE OF EACH INPUT & GET THE BEST OVER ALL COST ADVANTAGE THEREBY MAXIMIZING THE PROFIT. IN THE PRESENT MATERIALISTIC WORLD ALL EFFORTS ARE MADE TO INCREASE UTILIZATION, REDUCE WASTAGE, REDUCE COSTS Etc.Etc.
9 Productivity Concept, Measurement and Improvement
What is Productivity? ILO defines Productivity as the ratio between “Output of Work” and “Input of Resources. Productivity= Output Input Process InputOutput Waste 9
10 This definition applies to an enterprise, an industry or an economy as a whole. Productivity is simply the ratio between the amount produced and amount of resources used in the course of production. These resources can be: (Unit of resources is in brackets.) 1.Land (Hectares) 2.Material (Metric Tonne) 3.Plant and Machinery (Machine Hours) 4.People (Man Hour) 5.Capital (Rupees)
11 Is Productivity different from Performance?
Productivity takes into account output in relation to input. Performance takes into account output alone. Productivity =Output÷ Input In performance, we consider only the output and not the input. A performance index becomes comparison of actual output with some standard or expected output. Performance Index = Actual work done÷ Ideal or standard expected work. 11
12 →Case: It takes 3 Mtrs. of cloth to make a coat. In a day Prashant is expected to make 50 coats. He makes 40 coats from 111 Mtrs. Of cloth. What is Prashant’s Performance ? -40 coats Performance Index ? -{40 ÷ 50} x100= 80% What is Prashant’s cloth productivity index?
13 -Normally Prashant should have consumed 120 Mtrs. of cloth. However he managed to make 40 coats in 111 Mtrs. Of cloth. -Cloth Productivity Index = {120÷ 111} x 100= 108% What is productivity of cloth? -Cloth productivity= {40÷ 111} = 0.36 Coats/Mtr. 13
14 Case: Shalini was busy going through the production and machine hour consumption report of the past three months. 14 MONTHINPUT (Machine Hours) OUTPUT (No. of Units) September90,00099,000 October1,00,000 November1,50,0001,35,000 The reports clearly showed that there had been an increase in production with a simultaneous increase in machine hour consumption. Shalini was not sure whether it really indicated a rise in productivity or merely increase in production. How should she get an answer to this?
15 Solution: -Productivity per Machine Hour= Production Units÷ Machine Hours -Productivity for September= 99,000÷ 90,000= 1.1 -Productivity for October= 1,00,000÷ 1,00,000= 1.0 -Productivity for November = 1,35,000÷ 1,50,000= 0.9 15
16 MONTHINPUT (Machine Hours) OUTPUT (No. of Units) PRODUCTIVITY September90,00099,0001.1 October1,00,000 1.0 November1,50,0001,35,0000.9 16 We can see from the table that while production is rising from September to November; productivity is falling.
17 Typically when markets are booming it is worth increasing production so as to capture market- share even if productivity does not increase. Conversely, during the lean periods when selling becomes difficult, increasing production will only result in increasing unsold stocks. It is, therefore, important to focus on increase in productivity a it helps in maintaining profitability. Today’s organizations are looking at Productivity improvements by cost reduction thereby protecting their profit margins.
18 Partial Productivity →Definition Ratio of output to one class of input.
At a given time it considers only one input and ignores all other inputs. Its significance lies in its focus on utilization of one resource. For instance, labour productivity is measured using utilization of labour hours.
Capital productivity is measured in Rupees.
19 → Case: -As a part of new assignment, Parag of Pop-Corn Products was asked to identify areas for productivity improvements. He collected data on all inputs and outputs of previous year’s operations being transferred into equivalent of money units. The table below gives details with all figures in lakh rupees. 19 OUTPUT1000 INPUT Human300 Material200 Capital300 Energy100 Other Expenses50 Parag plans to calculate values of partial productivity to aid in his study. Please help him in his endevour.
20 →Solution: -Partial productivity of various inputs is as follows: Human productivity= 1000÷300= 3.3 Material Productivity= 1000÷200=5.0 Capital Productivity= 1000÷ 300 =3.3 Energy Productivity= 1000÷ 100= 10.0 Productivity of other expenses= 1000÷50=20.0 20
21 AdvantagesDisadvantages
Easy to understandMisleading if used alone. Easy to obtain dataCannot explain overall cost increase Diagnostic tool to pinpoint areas of improvement Profit control is not precise 21
22 Total Factor Productivity In an effort to improve productivity of labour, company may install more machinery. Then productivity of labour will go up bringing down the capital productivity. Partial productivity that typically uses only one resource at a time fails to grasp this paradox. Historically labour and capital were considered to be the most significant in contribution in the process of production.
23 Therefore, in The Total Factor Productivity model developed by John W. Kendrick in 1951, he has taken only labour and capital as only two input factors. → For instance, Products worth Rs 100 lakhs were manufactured and sold in a month. It consumed Rs 20 lakhs worth labour hours and Rs 55 lakhs worth capital. - The Factor Productivity = 100÷ (20+55)= 1.33 23
24 AdvantageDisadvantage Data is easy to obtainDoes not consider impact of material and energy inputs, though material typically forms 60% of the product cost. Appealing from the viewpoint of the corporate and the National economist. 24
25 Multi-factor Model of Productivity Developed by Scott D. Sink
Multi-factor Productivity Measurement Model considered Labour, Material and Energy as major inputs. Capital was deliberately left out as it is most difficult to estimate how much capital is being consumed per unit/ time. The concept of depreciation used by accountants make it further difficult to estimate actual capital being consumed.
26 Total Productivity Model
Total Productivity Model developed by David J. Sumanth in 1979 considered 5 items as inputs. These are Human, Material, Capital, Energy and other expenses. This model can be applied in any manufacturing or service organization. Total Productivity= Total Tangible Output÷ Total Tangible Input.
27 Total tangible output= Value of finished units produced + partial units produced + Dividends from securities + Interests from bonds +Other incomes. Total tangible inputs= Value of human inputs+ capital inputs+ materials purchased+ energy inputs + other expenses (taxes, transport, office expenses etc.) 27 AdvantagesDisadvantages All quantifiable inputs are considered.Data is difficult to compute. Sensitivity analysis can be done.Does not consider intangible factors of input and output. Provides both firm level and operational unit level productivity.
28 American Productivity Centre (APC) Model American Productivity Centre has been advocating a productivity measure that relates profitability with productivity and price recovery factor.
Profitability= Sales Costs {Output Quantities x Prices} {Input Quantities x Unit Costs} Productivity x Price Recovery Factor. The APC model is different from other models in its treatment, by inclusion of Price Recovery Factor. 28
29 What is price recovery factor? It is a factor that captures the effect of inflation. The changes in this factor over time indicate whether changes in input costs are absorbed, passed on, or over compensated for, in the price of the firm’s output. Thus inclusion of this factor will show whether gains or losses of a firm are due to changes in productivity or it merely indicates the fluctuations in the prices of material consumed and sold. 29
30 Sumanth’s Five Pronged Model All efforts towards productivity improvement have always been focused on the resources i.e. men, material, money, time, machinery, etc and the processes through they undergo to give output. In 1982, Sumanth and Omachanu classified fifty four different productivity techniques into five basic types: (1)Technology (2)Employee (3)Product (4)Process, and (5)Material
31 Product and Process improvement:
Value analysis aids in eliminating non-value adding function i.e. those function resulting in low performance at high costs from the product and processes.
On the technology front, extremely precise and accurate high-speed machines and systems like CAD,CAM,CIM,FMS etc have drastically reduced the processing time.
On the human front, incentive plans, job enrichment, fringe benefits etc are used to encourage value-adding inputs from people.
32 Inventory control, MRP, material handling systems etc. reduce the time, space, effort and money involved in making material available for its time and place utility. Techniques like work-study, ergonomics, etc eliminate motions that are non-productive or make them easy to perform are included in the human factor. Today, Lean Production System approach is a holistic one, which covers all areas of productivity improvement.
33 In order to sustain, a few other techniques like JIT, TPM, TQC, KAIZEN, Quality Circles etc can be applied simultaneously. Summary A. Technology Based -CAD, CAM, Integrated CAM, Robotics, Laser Beam Technology, Energy Technology, Group Technology, Computer Graphics, Simulation, Maintenance Management, Rebuilding Old Machinery, Energy Conservation.
34 B. Employee Based -Financial Incentives, Group Incentives, Fringe Benefits, Promotions, Job Enrichment, Job Enlargement, Job Rotation, Worker Participation, MBO, Skill Enhancement, Learning Curve, Working Condition Improvement, Communication, Zero Defects, Punishment, Recognition, Quality Circles, Training, Education, Role Perception, Supervision Quality.
35 TOTAL QUALITY MANAGEMENT(TQM) QUALITY IS ESTABLISHING STANDARDS AND SPECIFICATIONS. Ultimately, if the customer voice ( in terms of fitness of use ) is to be incorporated into the PRODUCT or service, it can be done only by laying down standards or specifications for the product to or service. QUALITY IS CONFORMANCE TO STANDARDS. STANDARDS ARE MEANINGLESS UNLESS THEY ARE COFORMED TO. STATISTICAL PROCESS CONTROL, POKA YOKE ( MISTAKE PROOFING ), AND MANY SUCH QUALITY MGMT., ASSURANCE AND CONTROL TECHNIQUES FOCUS ON THIS AREA.
36 QUALITY : IS :- MEETING THE AGREED REQUIREMENTS OF THE CUSTOMER, AT THE LOWEST COST, FIRST TIME AND EVERY TIME. THE STANDARDS & SPECIFICATIONS PROVIDED BY THE CUSTOMER CONSTITUTE THE AGREED REQUIREMENTS OF THE CUSTOMER. FIRST TIME & EVERY TIME MEAND WITHOUT REWORK OR REJECTION. 36
37 TQM TQM IS NOT A ONE TIME ACTIVITY BUT HAS TO BE PERSUED BY ALL THE EMPLOYEES OF THE ORGANIZATION CONTINUOUSLY. THE CUSTOMER TYPICALLY NEEDS THREE THINGS. “ QUALITY, PRICE & DELIVERY.” TQM LITERATURE OFTEN REFERS TO THIS AS QCD WHERE C HERE REFERS TO COST WHICH OFTEN PLAYS AN IMPORTANT ROLE IN DECIDINGAS TO HOW LOW WE CAN KEEP THE PRICE?WE HAVE TO SUPPLYALL THE THREE TO SATISFY THE CUSTOMER. 37
38 TQM - Quality is Free
MANY BELIEVE THAT THERE WILL BE TRADE OFF BETWEEN QUALITY & COST, WHICH IS TYPICALLY DRIVEN BY WESTERN THINKERS BUT IT IS NOT SO. COSTS GO UP WHEN YOU BLINDLY RAISE THE STANDARDS AND SPECIFICATIONS OF THE PRODUCT, WITHOUT ANALYSING THEACTUAL REQUIREMENTS & WHETHER IT IS ADDING A PROPORTIONAL VALUE TO THE PRODUCT IN ADDITION TO THE COSTS.
39 HARD & SOFT FACTORS OF THE ORGANIZATION
SOFT FACTORS NEED MORE ATTENTION. POLITICAL & SOCIAL ISSUES ( ANTI GROWTH MOVEMENTS, ENVIRONMENTAL RESTRICTIONS, SHORTAGE OR PERCEIVED SHORTAGE OF TECHNICALLY QUALIFIED TECH.PROFESSIONALS & WORKERS ALSO AFFECT THE PROCESS. 39
40 TOTAL QUALITY MANAGEMENT(TQM)
TQM, TOTAL QUALITY MANAGEMENT IS AN INTEGRATED APPROACH TO DELIGHTING THE CUSTOMERS ( BOTH INTERNAL & EXTERNAL ) BY MEETING THEIR EXPECTATIONS ON A CONTINUOUSBASIS, THROUGH EVERY ONE INVOLVED WITH THE ORGANIZATION, WORKING IN CONTINUOUSIMPROVEMENT ALONG WITH PROPER PROBLEM SOLVING METHODOLOGY. 40
41 TOTAL QUALITY MANAGEMENT(TQM)
QUALITY IS FITNESS FOR USE. THIS DEFINITION PUT FORTH BY JURAN, REPRESENTS THE CUSTOMER’S POINT OF VIEW.CUSTOMERS ARE USUALLY MULTIPLE, AND THEY MAY PUT THE PRODUCT OR SERVICE TO SUCH MULTIPLE USES, WHICH THE MANUFACTURER MAY NOT HAVE INTENDED. IN ANY CASE, THE CUSTOMER’S VIEW POINT IS MOST IMPORTANT AS IT IS HE USES THE PRODUCT. 41
42 HOW TO IMPROVE HARD & SOFT FACTORS IN PRODUCTIVITY HARD FACTORS :
1. PROPER PLANT UTILIZATION. 2. CONDITION UNDER WHICH THE WORK SHOP IS CONCERNED. 3. TRANSPORTATION & CANTEEN FACILITIES. 4. ELIMINATION OF HAZARDS Etc. 42
43 HOW TO IMPROVE HARD & SOFT FACTORS IN PRODUCTIVITY SOFT FACTORS : 1. JOB SPECIFICATIONS. 2. INCENTIVES. 3. RECOGNITION. 4. JOB MORALE. 5. ENTHUSIASM. 6. SYMPATHY. 7. SINCERITY & HONESTY. 8. SAFETY Etc. 43
44 Quality Circles
Quality Circles were the logical consequence of the various waste elimination programmes that were run in many Japanese corporations in early fifties. It provided a platform for the workers to get together and use techniques for their quest for continuous self-development and organizational improvement. In 1980, the first Quality Circle was launched in Hyderabad plant of Bharat Heavy Electricals Limited. 44
45 Definition and Meaning Quality Circle is a small group of employees in the same work area or doing a similar type of work who voluntarily meet regularly for about an hour every week to identify, analyze and resolve work related problems, leading to improvement in their total performance ad enrichment of their work life. This definition is quite comprehensive and most commonly accepted. Every part of the definition is significant. 45
46 → Why small group of employees? -Experience indicates that the optimum number of a Q.C. is about eight to ten. -If a circle is formed with less than five members, one can imagine the strength of the group when absenteeism is high. -Interaction and participation becomes more pronounced when group members are more than say, six. 46
47 → Why in the same work area or doing similar type of work? -This ensures Q.C. to be a homogeneous and cohesive group - The discussion that takes place remains interesting to everyone only if members are from the same background. -It also helps the members to understand the intricacies of the problem. -Also the application of QC tools that are recommended require the expertise in the field. 47
48 → Why is participation voluntary? -‘Voluntary’ in the Japanese context has a different interpretation as compared to what is normally understood in the Indian context. -To the Japanese, the very word ‘voluntary’ implies 100% participation. -Hence, when a company in Japan decides to implement Quality Circle, every body has to enroll as a member. -Japanese have refrained from using from using the word ‘compulsory’ as it indicates not just 100% participation but achievement of targets as well. 48
49 Quality circle requires some amount of creativity that is not under control, therefore, the word voluntary is used to indicate that achieving targets is not mandatory, but participation is compulsory. In India the term ‘voluntary’ has been used to circumvent the possible opposition from the trade unions. → Why to meet regularly for an hour every week? Meeting regularly is absolutely essential for the success of Q.C. 49
50 If the meetings are kept at longer intervals then cancellation of one or two meetings will further lengthen the interval leading to complete stoppage of work. → Why to analyze and resolve work related problems? As employees know more about their own work area than any body else, they are in a better position to solve problems occurring there. 50
51 Structure of Quality Circle
Steering Committee/ Departmental Committee Top Management TM Steering Committee Facilitator Leader/Deputy Leader Member Non Member Coordinating centre
52 Role of Each Element 1. Non-Members -Initially, all the employees in a particular work area may not volunteer in joining QC activity. -Some others may not be interested in activity but prefer not to get directly into it. -QC members must understand that solutions they find cannot be implemented without the cooperation of these non-members. -Members must encourage non-members to participate in activities so that they change their attitudes and form circle on their own. 52
53 Members
Members must be restricted to grass root level persons. -If membership is kept open only to officers and executive, the very purpose of QC gets defeated. -Members actively participate in selecting problems of their concern, analyzing it, finding solution to it and finally making presentation to the management. 53
54 3. Leader/Dy. Leader -In Japan, first line supervisors are nominated as leaders. -However, in India, it is advisable to make members choose their own leader. -Earlier there used to be only one person as leader. -But considering heavy absenteeism that prevails in our country, there can be one deputy leader who will take charge in absence of leader. 54
55 The leader or the deputy leader’s endeavour is -To maintain cohesiveness of the team. -To plan agenda for meetings. -To ensure participation from every member by assigning them work. -To encourage consensus decision making process. 4. Facilitator -Facilitator is the senior officer of the department where QC is working and is nominated by management. 55
56 The facilitator -Can facilitate more than one QC. -Is responsible for success of QC’s operating in his area. -Ensures necessary facilities are available to the team for operation. -Joins Steering Committee meetings and gives results of activities of QC. 56
57
5.Steering Committee -The committee comprises of heads of major functions as members and chief executive as the chairman. -The committee makes top management’s support visible. Steering committee -Meets regularly once in two months. -Takes overview of QC activity in entire organization. -Gives policy guidelines fr the propagation of movement 57
58
6. Coordinating Agency -The job of coordinating agency is similar to facilitator but on a large scale. -It coordinates QC activities throughout the organization. -Steering committee decides the composition of coordinating agency. Coordinating agency -Organizes a training programme for members when QC is formed. -Evolves norms to assess performance of different QCs. 58
59 -Prepares budget for QC activity. -Arranges guest speaker or library facility for members. 7. Top Management -Top Management does not fall within the formal structure of QC. -Its main job is to Convey its commitment to all employees Extend necessary support by attending conventions and sanctioning funds. Form quality council and establish a conducive atmosphere. 59
60 Quality Control Tools
Quality circles use certain basic tools to identify, analyze, and resolve their problems, called QC tools. A.Stratification Stratification refers to segregation of problem area into smaller units so that each can be taken more effectively. What appears to be a single problem may actually consist of a set of problems, each with a different root cause. 60
61 For instance, the problem of ‘Low output during the day’ may have different set of causes during the first and second shift. There is no way of knowing the correct way of stratifying the problem but when faced with a problem, one needs to use his skills and expertise to be able to do good stratification. The underlying principle is that when you find a problem, break into sub problems and find out the root cause of each. This procedure becomes faster and simpler. 61
62 Examples of Stratification Operation
WiseSkill, Experience, Years in job, Gender, individual, Union, Educational qualification. MachineryType of machine, Machine number, order new, structure, functions, moulds, jigs etc. Material WiseMaker, lot, date of arrival, date of use, Type, constituents, storage period, storage place, production place. Method WiseOperation method, place of operation, Temperature, Humidity, Pressure, No. of revolutions, speed, sampling etc. Time WiseDay, day and night, shift (in case of shifts), days of the week, month, normal day and the day after holiday, immediately after commencement, right before end, hour, around machine adjustment. Product WiseLot, vendor, New & old products, standards, special products. Etc. Inspection, calibration Inspector, Testing machine, Gauge, person in charge of calibration, place of calibration. 62
63 B. Check Sheet or Tally Table
A data-recording tool where the frequencies of each type are marked against it. The frequencies against each will indicate its relative importance and subsequently help in drawing pareto diagramme. 63 Sr. No.CauseTally MarksFrequencyRemarks 1.Broken Pin//// //7- 2Broken Link///3- 3Loose contact//// //// //12- 4No Power//2Known Before
64 C. Pareto Analysis
This technique was developed by Italian economist Pareto which showed that 20% population of a country controls 80% wealth and vice versa. This is applicable in most cases and is called 80-20 principle. Along these lines, Pareto diagramme can be drawn by finding out which 20% causes create 80% problems. 64
65 Pareto’s Analysis- A Case Study
Cause of decline in production in Rubber component manufacturing company. CodeItemCausesTime (Min)Time (Min)/Case ARubber Recovering161459.1 BRepair Delays325585.0 CRepairs534468.8 DAdjustments1220617.2 EPreparations482324.8 FComponent Search513727.4 GComponent Replacement 911012.2 HRaw Material Delay2780390 IMiscellaneous1730317.8 Total117251221.5 65
66 It can be seen problem H consumes most of the time. If we take care of this problem then there will be a dramatic increase in productivity as compared to taking other problems in the beginning. Thus the important problems need to be tackled on top priority. 66
67 D. Histogram
Histogram is also called frequency distribution chart and represents the condition of variance through the chart. It is a visual presentation of the spread on distribution of data to monitor a process and determine its consistency in meeting customers’ requirements. The population in the data is classified on the basis of their similarity into different groups or classes. 67
68 Each class or group is classified on the basis of their similarity into different groups or classes. Each class or group is represented by a rectangle or a bar. The class interval or causes of the problem or defects are placed on x-axis and frequencies or the number of defects is placed on the y-axis. The height of each bar is proportional to the number of frequency of its class interval and each bar should be of same width. 68
69 69
70 Uses of Histogram The shape of the diagram reveals the mean value variance. By frequency distribution chart the standard deviation and mean deviation can be calculated. By comparing with rated value, the process efficiency and rate of defective goods could be calculated. By visualizing variances, abnormalities come to light. 70
71 E. Ishikawa or Fish Bone Diagram (Cause and Effect Diagram)
Investigative tool developed by Dr. Ishikawa of Japan. This diagram is arrangement of all possible causes, which give rise to the effect or problem in hand. Prior to plotting this diagram, it is necessary to list down all possible causes by brain storming, so that no important cause is missed. They are segmented broadly into four ‘M’s viz Men, Machine, Method, and Material. 71
72 72 Final Effect Machines Men Materials Method Sub cause - Fish Bone Diagram
73 F. Control Charts
Control charts are used to investigate whether the manufacturing process is in stable condition or not and is used to maintain the manufacturing process in stable condition. Central line (CL), upper control line (UCL), and lower control limit (LCL) are the main three lines which constitute a control chart. 73 CL U C L LCL
74 →X (bar) Charts Central Line =Grand Mean UCL= Grand Mean + A 2 x Mean Range LCL= Grand Mean - A 2 x Mean Range →R (bar) Charts Central Line= Mean Range UCL= D 3 x Mean Range LCL= D 4 x Mean Range 74
75 A case of a Vending Machine Shalini is a vending machine operator at a coffee shop. The machine at her shop gives 50 ml of coffee at a time. Lately Shalini has noticed that machine never fills the glass exact ml but it either under fills or over fills. She complained to the manufacturer who sent Sachin, the service engineer to her shop. After inspecting the machine, Sachin said “I think we must test this machine fr precision and accuracy.” “How do we do that?” asked Shalini 75
76 “Let us take five samples of four readings each of this machine and then we can plot control chart and know answers to our questions.” Following is the chart that shows the readings recorded by Sachin and Shalini. 76 Sample No. X1X1 X2X2 X3X3 X4X4 Mean Range 14950 4949.51 249 5049.251 348 504948.752 448 4948.251 55049514849.253 Grand Mean49.05 Mean Range1.6
77 TQM
THE QFD MATRIX IS A VERY INTERESTING TOOL THAT CAN HELP US DEFINE/DESIGN A PRODUCT SO THAT IT IS ORIENTED TOWARDS CUSTOMER REQUIREMENTS. 77
78 QUALITY FUNCTION DEVELOPMENT IT IS A TECHNIQUE TO ASSURE THAT THE PRODUCT IS DESIGNED AND MANUFACTURED TO EXCEED THE CUSTOMER’S REQUIREMENTS, ENGINEERING CAPABILITIY & COMPETETIVE ANALYSIS FROM BOTH CUSTOMER AND FROM THE TECHNICAL POINT OF VIEW. IT INTEGRATES PRODUCT REQUIREMENTS & PRODUCT DEVELOPMENT. IT ALSO SHOWS ANY INTER RELATION BETWEEN ENGINEERING 78
79 HOUSE OF QUALITY MATRIX “ WHAT” ROOM SPECIFIES THE VOICE OF CUSTOMER IN TERMS OF THE REQUIREMENTS TO BE SATISFIED.THESE ARE GROUPED IN PRIMARY, SECONDARY & TERTIARY AND ARE RELATED AS PER THEIR IMPORTANCE. “HOW” ROOM ANSWERSL THOSE QUESTIONS AS TO HOW THE CUSTOMER REQUIREMENTSDEFINED ABOVE CAN BE MET IN TERMS OF DESIGN REQUIREMENTS. THESE ARE ALSO GROUPED AS PRIMARY, SECONDARY AND TERTIARY. 79
80 HOUSE OF QUALITY MATRIX “RELATIONSHIP MATRIX” JOINS THE “WHAT” & “HOW” ROOMS.IT GIVES THE RELATIONSHIP BETWEEN THE ENGINEERING DESIGN AND THE VOICE OF THE CUSTOMER. IT IS DENOTED BY :- a. Strong Correlation. b. Moderate Correlation. c. Weak Correlation. 80
81 Demings 14 points of MANAGEMENT
1. CREATE CONSTANCY OF PURPOSE. a. Innovation. b. Put resources into research & education. c. Continuously improve in product & service. d. Invest in the maintenance of equipment, furniture & fixtures.
2. Adopt the new philosophy. 3. Create dependency on mass inspection. 4. End the practice of awarding business on price tag alone. 5. Improve constantly and forever the system of manufacture and service. 6. Institute training & retraining. 7. Institute leadership. 82
8. Draw out fear. People are afraid of :-. Losing their raises & promotions.. New assignments.. Superior’s threats.. Admiting mistakes. 9. Breakdown barriers between staff ares. 10. Eliminate the slogans exhortation and tarcets for the workforce. 83
11. Eliminate numerical quotas. 12. Remove barriers to Pride of Workmanship. 13. Institute a rigorous programme for Education and Retraining. 14. Take action to accomplish Transformation. 84
85 PDCA( PLAN, DO, CHECK, ACT/ADJUST )CYCLE
Step 1. The first step is to study the process to understand & decide what changes might improve it. Step 2. To carry out tests or make the change, preferable on a small scale. Step 3.Observe & check the effects. Step 4. Understand the outcome of the test. Repeat the test if necessary, perhaps in a different environment. 85
86 Deming’s Chain Reaction in TQM
Improve Quality Cost Decreases >>> >> Production Improves >>> Captive market with quality & lower prices >>> Stay in business >>> Provide jobs & more jobs. 86
87 QUALITY TRIOLOGY IN TQM NON UNIFORMITIES IN A COMPANY 1. THE MULTIPLE FUNCTIONS IN ANY COMPANY. 2. THE MULTIPLE LEVELS IN THE COMPANY. 3. THE MULTIPLE PRODUCT LINES IN ANY COMPANY. 87
88 QUALITY TRIOLOGY IN TQM
QUALITY PLANNING. QUALITY CONTROL. QUALITY IMPROVEMENT. 88
89 QUALITY TRIOLOGY QUALITY PLANNING
To achieve a process capable of meeting Quality Goals : -- 1.Identify customers both Internal & External. 2. Identify customer needs. 3. Develop features that satisfy customer needs. 4. Establish quality goals. 5. Prove process capability. 89
90 QUALITY TRIOLOGY Quality control To achieve conduct of operations according to quality plans. 1.Choose units of measurements. 2.Establish how to measure. 3.Establish standards of performance. 4.Measure actual performance. 5.Interpret difference ( Standard vs Actual). 6.Take actions on the difference. 90
91 QUALITY TRIOLOGY QUALITY IMPROVEMENT
To achieve conduct of operations at levels of quality distinctly superior to planned performance. 1.Prove the need for improvement. 2. Build awareness of opportunities to interfere. 3. Organize for diagnosis. 4. Prove remedies are effective. 91
92 JURAN’S QUALITY IMPROVEMENT PLAN (JQIP) JQIP IS AN ACTION PLAN FOR SOLVING PROBLEMS WHICH ARE CHRONIC IN NATURE. JQIP IS FOR PROBLEMS WHICH ARE INTER DEPARTMENTAL IN NATURE INVOLVING MIDDLE AND UPPER LEVEL OF MANAGEMENT. THIS IS ALSO CALLED VITAL FEW APPROACH. JQIP DRAWS MEMBERS FROM AILING DEPTT., SUSPECT DEPTT., REMEDIAL DEPTT. JQIP GROUP HAS a LEADER, SECRETARY & MEMBERS. 92
93 JURAN’S QUALITY IMPROVEMENT PLAN (JQIP) The Team Leader’s function is to ensure that the team functions as a cohesive group. He should be senior enough to lead the team comfortably and trained adequately in the JQIP methodology & preferably previous experience as a member of JQIP TEAM. The secretary is responsible for preparing agendas, minutes & summaries. He submits these reports to thr quality council. JQIP members should meet atleast once a week. They go through the Juran work book and carry out the exercises given in the book. 93
94 Just in time ( jit ) Idle Resources form a portion of wastes in any organization. Idle resources may be required by someone else and denied to him/her. Taichi Ohno’s contribution was a major factor that has brought about the transformation in Toyota Corporation. According to him all non value adding activities are waste. His new definition broadened the scope of waste as it was understood till then. This naturally helped in tackling all types of wastes head on and by reducing wastes improved productivity levels. 94
95 SEVEN DEADLY WASTES IDENTIFIED BY TAICHI OHNO 1. WASTE ARISING OUT OF OVER PRODUCTION. 2. WASTE ARISING FROM TIME ON HAND. 3. WASTE ARISING FROM TRANSPORTING & UNNECESSARY MOTION. 4. WASTE ARISING OUT OF PROCESSESING. 5. WASTE ARISING FROM UNNECESSARY STOCK ON HAND. 6. WASTE ARISING FROM PRODUCING DEFECTIVE GOODS. 7. WASTE ARISING DUE TO TIME SPENT IN CHANGEOVER OF SET UP. 95
96 REDUCTION OF WASTES THERE ARE SPECIFIC METHODS TO REDUCE EACH TYPE OF WASTE. OVER PRODUCING CAN BE AVOIDED BY IMPROVING OUR UNDERSTANDING OF MARKET DEMANDS, SUPPLY RELATION, FORECASTING ETC. ETC. WAITING TIME CAN BE REDUCED BY PROPER ORIENTATION OF THE PROCESSES. MOTION ANALYSIS CAN HELP TO IDENTIFY UNNECESSARY MOVEMENTS & TRANSPORTATION. UNNECESSARY STOCK WILL GET ELIMINATED WITH THE IMPLEMENTATION OF JIT. 96
97 Process Oriented V/S Result Oriented Management (Pro.OM v/s ROM ) Process Oriented Mgmt. is based on the paradigm that the result is the effect of a number of of causes. If we concentrate on the causes and ensure that the causes operate exactly as the way, we want to the result is bound to happen, barring a random element that is uncontrollable. Since the results are bound to happen when the causes are perfected, process oriented mgmt. recommends that we stop worrying about the results. “ Karmanyeva adhikarastu ma phaleshu kadachana. “ 97
98 Process Oriented V/S Result Oriented Management (Pro.OM v/s ROM ) Process oriented management is deeply concerned about the result. An analogy might help in understanding : A student is told to, “ get good marks, I don’t know how?”. Another student is told, “ You must get Good marks.” So find out the correct way to study with regularity & diligence. 98
99 DIFFERENCE BETWEEN PROCESS & OPERATION
A Process is a summation of operations. Operation is a sub-unit in process. A process produces a part in production.
A Process is a summation of activities such as operations, delays, storages, transportation & every thing that happens between the beginning & the end of the process. An operation does not include inspection delays & all other aspects. 99
100 Value Adding Activities ( VAA) & Non Value adding activities By definition VAA are those that add value to product as seen from the customer’s point of view. All other activities are NVA activities. From this definition only Do those activities which are Valua adding, the rest are in any case Non Value Adding operations. Even Make Ready Operation are NVA activities. 100
101 What does TQM include?
TQM in short may be considered as a combination of TQC, JIT, TPM, KAIZEN & a Team Work simulating system of HRD.M
102 KANBAN
kanban IS A Japanese word meaning a card. Taichi Ohn was developing a push model in the 1950s when computers had just made an appearance. He devised a simple method. It was so simple that understand & use that it serves even today. The KANBAN is really a communication system between the work place that needs the components & the work place which produces the components. 102
103 KANBAN
The work centre needing the component (customer) posts the number of cards corresponding to the number of units they need say for the next 4 hours on a bulletin board. The rule is that the people at the work centre manufacturing the component (supplier) starts working only when they receive a Kanban. Thus the kanban ensures no over production or under underproduction takes place, no inventory piles up, complete customer orientation and excellent floor discipline. 103
104 KANBAN
Taichi Ohno regards KANBAN and AUTOMATION as the two pillars of JIT. JIT is really a marketing strategy, when a company does it tells its customers that they will be supplied JIT. 104
105 POKA - YOKE
POKA in JAPANESE means “ Inadvertant “ errors & “ Youkeru “ means,” To Avoid”. Thus Poka Yoke is a systematic technique to avoid errors in work. Most errors are caused by human beings. It happens when tasks are repetetive & hence boring.For example opening oa a brief case wrongl by mistake the contents will spill. Therefore to avoid such mistake the brief case should not be allowed to open in a wrong direction. Similarly a 5 Ampere plug may be inserted in a 15 Ampere Socket thereby damaging the equipment connected. This can be easyly avoided by making pins & sockets f different sizes. Lastly passengers alighting from Auto Rickshaws from the wrong side can be easyly stopped by welding a SINGLE Rod on the wrong side so that no on can get down from the wrong side. All examples given above are simple examples of Poka Yoke. 105
106 PRICIPLES OF POKA YOKE
1. Make things asymetrical. 2 Use counters that signal the number of times an item has been used. 3. Use different sizes, colours and shapes so that chances of errors are reduced. 4 Design things in such a way that it will not matter the way you fit it. Eg. Fuse capsule or computer floppy. 5. Use limit switches that trip the equipment on the onset of error condition. 106
107 ANDON & JIDOKA
WE ALL KNOW A STITCH IN TIME SAVES NINE AT A LATER DATE. A SYSTEM IS DESIGNED TO CATCH THE DEFECT. THIS WILL AVOID CASCADING OF THE SAME DEFECT & PREVENT THE SAME DEFECT ANY MORE DEFECTIVE PIECE COMING UP. 107
108 JIDOKA
Jidoka implies machine improvement and process improvement. Jidoka is development of more intelligent machines.
JIDOKA IN JAPANESE JIDOKA MEANSAUTOMATION WITH HUMAN TOUCH. ROUTINE WORK LIKE STARTING & STOPPING OF MACHINES CONSUMES LOT OF HUMAN EFFORT AND IF NOT DONE AT APPROPRIATE TIME CAN LEAD TO VARIOUS PROBLEMS. JIDOKA AUTOMATES THESE ACTIVITIES KEEPING HUMAN ELEMENT RESTRICTEDTO ONLY ABNORMAL THINGS LIKE DEFECTS. Eg. VIDEO CASSESTE PLAYER STOPS & STARTSREWINDING ONCE THE TAPE GETS OVER. 108
109 KAIZEN
KAI IN JAPANESE MEANS CHANGE AND ZEN MEANS FOR BETTER. THE MOVEMENT OF CONTINUOUS IMPROVEMENT IS CALLED KAIZEN IN JAPAN. EMPLOYEES ARE ENCOURAGED TO PARTICIPATE IN THEIR WORK PLACE IMPROVEMENT. THE UNDERLYING RULES ARE: 1. THERE ARE NO REWARDS. THE REWARDS MAKE THE PERSON LOOSE FOCUS. IT ALSO BRINGS UNHEALTHY COMPETETION & HAMPERS TEAM SPIRIT. 109
110 KAIZEN 2. ZERO COST / INVESTMENT – RESTRICTION OF IMPROVING WITHOUT SPENDING MONEY FLARES UP CREATIVITY & BRINGS ABOUT INNOVATION. 3. REPORT EACH IMPROVEMENT – PUTTING UP EACH IMPROVEMENT ON NOTICE BOARD & READING IT IN FRONT OF ALL EMPLOYEESGIVES SENSE OF PRIDE TO THE INDIVIDUAL WHO HAS BROUGHT ABOUT THE IMPORTACE. 110
111 MRP IN JIT PHILOSOPHY
The basic philosophy of JIT is elimination of wastes. By this it focuses on availability of things in right quantity at the right time. MRP (Material Requirement Planning ) takes the output from MPS( Master Production Schedule),combines with the information of Inventory records & determines the schedule of timing & quantities to get the material at the right time. MRP is in essence an information system used to handle dependent materials. 111
112 MRP IN JIT PHILOSOPHY The end products are exploded using the Bill of Material using the and the gross requirements plan is developed which indicates the quantuty and timing for ordering components. The net Material Requirement Planning are then worked out based on stocka in hand & on order. 112
113 MANUFACTURING RESOURCE PLANNING II ( MRP-II )
In closed loop MRP the infromation from the MRP and the other modules is fed back to ensure that the schedules are feasible figure shows then the information is fed back to the master schedule and the MRP module. Adjustment to this will result in changes to the planned order release so that capacity plan is feasible. 113
114 MANUFACTURING RESOURCE PLANNING II ( MRP-II ) It is known as MRP – II because the closed loop system allows the planning of resources in Manufacturing environment. Eg., MRP module feeds information into the capacity planning module. The use of Manufacturing resources can now be planned and that information can be fed back through the closed loop to utilise the resources better. 114
115 VALUE ENGINEERING & VALUE ANALYSIS
VALUE ANALYSIS IS A TECHNIQUE THAT ALLOWS US TO INCREASE THE VALUE OF A PRODUCT OF SERVICE SYSTEMATICALLY, ELIMINATING ALL THE FUNCTIONS THAT DO NOT ADD ANY VALUE OR BENEFIT TO THE PRODUCT OR SERVICE. A PRODUCT OR A PROCESS EXISTS TO FULFILL A NEED. This need or set of needs is termed as a function that a product or process satisfies. 115
116 VALUE ENGINEERING & VALUE ANALYSIS
E.g. Knife exists to fulfill the need for cutting. Therefore to cut is the function of Knife. Value analysis systematically categorizes all these functions, does a cost benefit analysis and increases the value of product or process. 116
117 Meaning of Value Value is a function of desired Performance and cost. This can be expressed as : Desired Performance ( P ) Value = ----------------------------- Overall costs ( C ) Desired performance is expressed by the term worth which is defined as the lowest cost to achieve the use Function and aesthetic ( sell ) FUNCTION. 117
118 VALUE ENGINEERING & VALUE ANALYSIS VALUE ENGINEERING IS WHERE THE VALUE OF ALL COMPONENTS USED IN THE CONSTRUCTION OF A PRODUCT FROM DESIGN TO FINAL DELIVERY ARE COMPLETELY ANALYSED AND PURSUED. VALUE ANALYSIS IS A STEP BY STEP APPROACH TO IDENTIFY THE FUNCTION OH A PRODUCT, PROCESS, SYSTEM OR SERVICE TO ESTABLISH A MONETORY.
https://slideplayer.com/slide/9423318/
LEARNING OBJECTIVES To understand and explore different areas of Productivity Techniques and their applications in operations with the help of real life.
Published byDorothy Wood
https://slideplayer.com/slide/12824895/
Careers in Engineering Industrial and Manufacturing Engineering Preparation to Enroll in Engineering
https://slideplayer.com/slide/5349200/
PRESENTING Industrial Engineering and Management Program Information and Career Opportunities
https://slideplayer.com/slide/5219056/
Reza.Maleki @ ndsu.edu
https://fpa-trends.com/article/productivity-management-essential-capability-finance-executives-seeking-drive-strategy
https://opexsociety.org/body-of-knowledge/productivity-management-an-essential-capability-for-maximizing-the-value-of-operational-excellence/
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